AGENCY:

Joint Board for the Enrollment of Actuaries.

ACTION:

Final regulations.

SUMMARY:

This document contains final regulations under section 3042
of the Employee Retirement Income Security Act of 1974 (ERISA) relating
to the enrollment of actuaries. These regulations update the eligibility
requirements for performing actuarial services for ERISA-covered employee
pension benefit plans, including the continuing professional education
requirements, and the standards for performing such actuarial services.
These regulations will affect employee pension benefit plans and
the actuaries providing actuarial services to those plans.

DATES:

Effective date: These regulations are effective
on April 29, 2011.

FOR FURTHER INFORMATION CONTACT:

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

The collections of information contained in these final regulations
have been reviewed and approved by the Office of Management and Budget
in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
3507(d)) under control number 1545-0951.

The collections of information in the regulations are in sections
901.1(i), 901.1(j), 901.10, 901.11(d), 901.11(f)(2)(D), 901.11(f)(2)(G)
and (H), 901.11(f)(3)(ii), 901.11(g)(3), 901.11(j)(1), 901.11(j)(2),
901.11(k), 901.11(l)(4)(v), 901.12(e), and 901.54. These collections
of information are required in order for the Joint Board to carry
out its function under section 3042 of ERISA, which provides that
the Joint Board shall, by regulations, establish reasonable standards
and qualifications for persons performing actuarial services with
respect to plans subject to ERISA and, upon application by any individual,
shall enroll such individual if the Joint Board finds that such individual
satisfies such standards and qualifications, and also provides that
the Joint Board may, after notice and an opportunity for a hearing,
suspend or terminate the enrollment of an individual who fails to
discharge his duties under ERISA or who does not satisfy the requirements
for enrollment.

An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a valid
control number.

Background

This document contains final regulations under section 3042
of the Employee Retirement Income Security Act of 1974 (88 Stat. 829),
Public Law 93-406 (ERISA). Section 3042 of ERISA provides that the
Joint Board for the Enrollment of Actuaries (Joint Board) shall, by
regulations, establish reasonable standards and qualifications for
persons performing actuarial services with respect to plans subject
to ERISA and, upon application by any individual, shall enroll such
individual if the Joint Board finds that such individual satisfies
such standards and qualifications. Section 3042 also provides that
the Joint Board may, after notice and an opportunity for a hearing,
suspend or terminate the enrollment of an individual who fails to
discharge his duties under ERISA or who does not satisfy the requirements
for enrollment.

Consistent with section 3042, the Joint Board has promulgated
regulations at 20 CFR Part 901, addressing eligibility for enrollment,
requirements for continuing professional education of enrolled actuaries,
professional standards for performance of actuarial services under
ERISA, bases for disciplinary actions and the procedures to be followed
in taking those actions. The Joint Board last issued comprehensive
amendments to the regulations regarding section 3042 in 1988 (53 FR
34484). In anticipation of amending the Joint Board regulations,
the Joint Board issued a Request for Information (RFI) which was published
in the Federal Register on June 30,
2004 (69 FR 39376). On December 21, 2007, the Joint Board issued
final regulations relating to user fees for the initial enrollment
and reenrollment as an enrolled actuary in the Federal Register (72 FR 72606). On September 21, 2009,
the Joint Board issued proposed regulations under section 3042 (74
FR 48030). Written public comments were received on the proposed
regulations, and a public hearing was held on February 25, 2010.

Explanation of Provisions

I. Overview

These regulations finalize the rules proposed in (REG-159704-03,
2009-46 I.R.B. 632) (published September 21, 2009), with certain modifications
highlighted in this preamble.

II. Eligibility for Initial Enrollment

These regulations provide that an individual applying to be
an enrolled actuary must fulfill (1) an experience requirement, (2)
a basic actuarial knowledge requirement, and (3) a pension actuarial
knowledge requirement. All applicants for enrollment must agree to
comply with these regulations and with any other guidance as required
by the Joint Board.

These regulations provide two alternative ways of satisfying
the experience requirement. Within the 10-year period immediately
preceding the date of the application, the applicant must have completed
either (1) at least 36 months of certified responsible pension actuarial
experience, or (2) at least 18 months of certified responsible pension
actuarial experience if the applicant has a total of 60 months of
certified responsible actuarial experience.

These regulations retain the definitions of responsible actuarial
experience and responsible pension actuarial experience. Responsible
actuarial experience means actuarial experience (1) involving participation
in making determinations that the methods and assumptions adopted
in the procedures followed in actuarial services are appropriate in
the light of all pertinent circumstances, and (2) demonstrating a
thorough understanding of the principles and alternatives involved
in such actuarial services. Responsible pension actuarial experience
means responsible actuarial experience involving valuations of the
liabilities of pension plans, wherein the performance of such valuations
requires the application of principles of life contingencies and compound
interest in the determination, under one or more standard actuarial
cost methods, of such of the following as may be appropriate in the
particular case: (1) normal cost; (2) accrued liability; (3) payment
required to amortize a liability or other amount over a period of
time; and (4) actuarial gain or loss.

These regulations define certified responsible actuarial
experience to mean responsible actuarial experience of
an individual that has been certified in writing by the individual’s
supervisor. These regulations define certified responsible
pension actuarial experience to mean responsible pension
actuarial experience of an individual that has been certified in writing
by the individual’s supervisor if the supervisor is an enrolled
actuary. If the individual’s supervisor is not an enrolled
actuary, these regulations provide that the pension actuarial experience
must be certified in writing by both the supervisor and an enrolled
actuary with knowledge of the individual’s pension actuarial
experience.

One commenter requested greater flexibility in satisfying the
experience requirements for enrollment based on experience in more
specialized pension areas of practice. These regulations retain the
requirement that enrolled actuaries have certified responsible pension
actuarial experience as previously defined because the Joint Board
believes that a broad base of pension knowledge is necessary to recognize
issues that may arise even in a specialized area of practice. Nonetheless,
the Joint Board recognizes that the broad base of experience needed
to become an enrolled actuary does not qualify an enrolled actuary
to do every type of work for which an enrolled actuary is required.

In response to the proposed regulation, one commenter suggested
that, given the pace of change and for consistency with the experience
requirement for return from inactive status, all of an applicant’s
responsible pension experience should be completed within 5 years
preceding enrollment (rather than 10 years). The commenter pointed
out that for reenrollment under the proposed regulations, an inactive
enrolled actuary would need more recent experience. These regulations
retain the rule in the current regulations that requires the experience
for initial enrollment to have been completed within the previous
10 years, and, as explained in more detail in section IV of this preamble
(Inactive Enrolled Actuaries), they retain the requirements in the
proposed regulations for an enrolled actuary who wishes to return
to active status from inactive status that depends on how long the
actuary has been on the inactive roster. The difference in the timing
of the required experience for initial enrollment and for returning
from inactive status reflects the different purposes served by the
two requirements. The Joint Board requires enrolled actuaries who
let their enrollment lapse into inactive status to demonstrate their
return to active practice with more recent experience. It can be
expected that, in general, such actuaries are farther along in their
careers and are more likely to quickly build up, or return to, an
active independent practice. For such actuaries, the Joint Board
believes that recent pension experience is paramount. In contrast,
it can be expected that newly enrolled actuaries will take longer
to develop active independent practices. For these actuaries, the
Joint Board believes that a longer look-back period is reasonable.

In response to the proposed regulations, one commenter suggested
that, in order to make sure that an actuary does not lose the opportunity
to get credit for responsible actuarial and responsible pension actuarial
experience, enrolled actuaries should be required to certify the experience
of potential candidates annually and when the potential candidate
changes supervisor or employer. The Joint Board feels it is not necessary
to add this additional paperwork requirement for enrolled actuaries
who supervise and train actuaries who are not yet enrolled. The Joint
Board will address on a case-by-case basis situations involving the
inability of the Executive Director to obtain certification of an
applicant’s experience.

These regulations do not amend the definition of basic actuarial
knowledge required for initial enrollment. Basic actuarial knowledge
may be obtained in one of three ways— successful completion
of a Joint Board basic examination; successful completion of one or
more proctored examinations which are given by an actuarial organization
and which the Joint Board has determined cover substantially the same
subject areas, have at least comparable levels of difficulty, and
require at least the same competence as the Joint Board basic examination;
or receipt of a bachelor’s or higher degree in either actuarial
mathematics or another area which include at least as many semester
hours or quarter hours as required by the Joint Board in mathematics,
statistics, actuarial mathematics, and other areas determined by the
Joint Board.

These regulations provide that an applicant may demonstrate
pension actuarial knowledge through successful completion, within
the 10-year period immediately preceding the date of the application
for enrollment, of either the Joint Board pension examination (currently
administered as the EA-2A and EA-2B), or an approved pension examination,
or examinations, given by an actuarial organization which the Joint
Board has determined cover substantially the same subject areas, have
at least comparable levels of difficulty, and require at least the
same competence as the Joint Board pension examination. For this
purpose, these regulations provide that the date of successful completion
of an examination is generally the date a candidate sits for the examination,
provided that the candidate receives a passing grade on that examination.
However, an applicant who sat for a given examination prior to the
effective date of these regulations will be deemed to have sat for
such examination on the effective date.

III. Eligibility for Re-enrollment

A. Requirement to file an application for renewal

These regulations do not change the requirement that an enrolled
actuary seeking to renew his or her enrollment must file an application
for renewal of enrollment between October 1, 2010 and March 1, 2011,
and between October 1 and March 1 of every third year thereafter.
An enrolled actuary seeking renewal must complete the required continuing
professional education hours prior to submitting an application for
renewal, but in no event later than the December 31 immediately preceding
the March 1 due date for the application for renewal. These regulations
continue to provide that the effective date for renewal of enrollment
for individuals who are currently enrolled (and in active status)
and who file complete renewal applications by the March 1 due date
shall be the April 1 immediately following the March 1 due date.
The effective date of renewal of enrollment for an individual who
files a complete renewal application after the March 1 due date is
the later of the April 1 immediately following the due date of application
and the date of the notice of renewal.

B. Continuing professional education requirement

1. Number of hours required

These regulations retain the general requirement that an enrolled
actuary earn 36 hours of continuing professional education during
each full enrollment cycle. These regulations define the enrollment cycle to mean the three-year period from January
1, 2011, to December 31, 2013, and every three-year period thereafter.

Several commenters suggested that the time period for earning
continuing professional education credit should extend beyond the
end of the enrollment cycle. The Joint Board decided that it is reasonable
to expect enrolled actuaries to make time for satisfying their continuing
professional education requirement during the enrollment cycle and
that extending the end of each enrollment cycle so that it overlaps
with the beginning of the next enrollment cycle would create an unnecessary
complication. However, an enrolled actuary who does not complete
the required hours by December 31 of the enrollment cycle may submit
an application to return to active status after completing the required
hours. Such an individual’s reenrollment will be effective
on the later of (1) the April 1 immediately following the end of the
enrollment cycle or (2) the date that the Joint Board grants the application.
These regulations include examples that illustrate when an enrolled
actuary’s reenrollment will be effective.

These regulations make no change to the rule that newly enrolled
actuaries who are initially enrolled during the first year of an enrollment
cycle must complete 24 hours of continuing professional education
hours in the enrollment cycle during which they are enrolled. Newly
enrolled actuaries who are initially enrolled during the second year
of an enrollment cycle must complete 12 hours of continuing professional
education hours in the enrollment cycle during which they are enrolled.
Newly enrolled actuaries who are initially enrolled during the last
year of an enrollment cycle are exempt from the continuing education
requirements until the next enrollment cycle, but must file a timely
application for renewal.

These regulations require at least 18 hours of continuing professional
education in core subject matter during the enrollment cycle that
ends December 31, 2010, for all enrolled actuaries enrolled during
the entire cycle. Thereafter, for actuaries who have already been
enrolled for at least one full enrollment cycle before the start of
a new enrollment cycle, these regulations provide that only 12 of
the 36 hours of required continuing professional education during
the new enrollment cycle must consist of core subject matter.

These regulations provide that the required continuing professional
education hours must be earned after January 1 of the year the enrolled
actuary becomes enrolled. Half of the required hours for newly enrolled
actuaries must be comprised of core subject matter.

The Joint Board received comments both in favor of and against
the proposed two-tiered requirement that 18 hours of continuing professional
education be core subject matter for enrolled actuaries during their
first full enrollment cycle but only 12 hours be core subject matter
for each subsequent enrollment cycle. In light of the complexity
and rapid changes in core subject matter, the Joint Board feels that
some ongoing education in core subject matter is always necessary.
On the other hand, the Joint Board wishes to encourage enrolled actuaries
at every level of experience to satisfy a portion of their continuing
professional education requirement through participation in non-core
programs that are designed to enhance their knowledge in matters related
to the performance of pension actuarial services. The Joint Board
feels that the two-tiered approach is the best way to achieve that
result. Accordingly, these regulations adopt the two-tiered requirement
as proposed.

For each full enrollment cycle beginning after December 31,
2010, these regulations require at least 2 of the required core hours
of continuing professional education to relate to ethical standards.
Some commenters suggested either not treating continuing professional
education on ethical standards as core subject matter or increasing
the number of hours required to consist of core subject matter by
2 hours to account for the ethics requirement. The Joint Board feels
that fidelity to the high ethical standards of practice is as essential
for enrolled actuaries as is knowledge of the technical rules studied
in other core areas. Ethics have always been considered to be core
subject matter, and an enrolled actuary who wishes to increase the
number of hours spent studying the core technical rules may always
undertake more than the minimum number of core hours. Accordingly,
the Joint Board feels that including ethical standards as part of
the required hours of core subject matter is appropriate.

In response to comments, these regulations clarify that when
core subject matter hours are required (including when an individual
seeks to return to active status from inactive status), an individual
must complete a minimum of two hours of continuing professional education
credit relating to ethical standards, regardless of the total number
of core hours required.

The regulations require an enrolled actuary to retain certain
records evidencing completion of continuing professional education
for three years after the end of the enrollment cycle for which the
enrolled actuary claims the credit. To receive credit based on participation
in a qualifying program, the regulations require the enrolled actuary
to retain the certificate of completion or certificate of instruction,
as applicable. To receive credit for publications, these regulations
require the enrolled actuary to retain the name of the publisher,
the title and author of the publication, a copy of the publication,
the date of publication, the total credit hours earned, and the total
core and non-core credit hours earned. To receive credit for service
on a Joint Board advisory committee, for preparation of Joint Board
examinations, for passing examinations sponsored by professional organizations
or societies, or for passing the Joint Board pension examination,
these regulations require the enrolled actuary to retain sufficient
documentation to establish completion of such hours.

All continuing professional education must be in either core
or non-core subject matter. The Joint Board received a number of
comments requesting expansion and clarification of the content that
would be classified as core or non-core credit. These regulations
adopt the same definition of core and non-core continuing professional
education material as proposed. The Joint Board recognizes that more
specific rules proscribing the required content could provide greater
certainty for qualifying sponsors and enrolled actuaries regarding
the designation of credits as core and non-core. However, given the
frequent changes in pension law, the impact of new court decisions,
and other changing factors that affect an enrolled actuary’s
practice, it is important to keep the definition of the content requirement
somewhat flexible. The Joint Board relies on the integrity and judgment
of the qualifying sponsors to provide appropriate material and to
appropriately categorize the material as core or non-core.

Similarly, a number of commenters requested a more specific
definition of ethical standards for purposes of meeting the ethics
requirement of the continuing education requirement. Although the
Joint Board has not amended the regulation, it notes that courses
that include discussion of actuarial codes of conduct, actuarial responsibilities
and any actions discussed in section 901.20 of the regulations would
comply with this requirement.

These regulations redefine core subject matter as program content
and knowledge that is integral and necessary to the satisfactory performance
of pension actuarial services and actuarial certification under ERISA
and the Internal Revenue Code. Such core subject matter includes
the characteristics of actuarial cost methods under ERISA, actuarial
assumptions, minimum funding standards, titles I, II, and IV of ERISA,
requirements with respect to the valuation of plan assets, requirements
for qualification of pension plans, maximum deductible contributions,
tax treatment of distributions from qualified pension plans, excise
taxes related to the funding of qualified pension plans and standards
of performance (including ethical standards) for actuarial services.
These regulations further specify that core subject matter includes
all materials included on the syllabi of any of the pension actuarial
examinations offered by the Joint Board during the current enrollment
cycle and the enrollment cycle immediately preceding the current enrollment
cycle.

These regulations retain the definition of non-core subject
matter as program content designed to enhance the knowledge of an
enrolled actuary in matters related to the performance of pension
actuarial services. These regulations provide that examples of non-core
subject matter include economics, computer programming, pension accounting,
investment and finance, risk theory, communication skills, and business
and general tax law.

3. Qualifying Program Requirement

These regulations do not change the requirement that a program
used to earn continuing professional education credit must be a qualifying
program. These regulations modify the definition of qualifying program
to be a course of learning that— (A) is conducted by a qualifying
sponsor who identifies the program as a qualifying program; (B) is
developed by individual(s) qualified in the subject matter; (C) covers
current subject matter; (D) includes written outlines or textbooks;
(E) is taught by instructors, discussion leaders, and speakers qualified
with respect to the course content; (F) includes means for evaluation
by the Joint Board of technical content and presentation; (G) provides
a certificate of completion to those who have successfully completed
the program; and (H) provides a certificate of instruction to those
who have served as instructors, discussion leaders, or speakers.

These regulations provide that qualifying sponsors are sponsors
recognized as such by the Executive Director and whose programs offer
opportunities for continuing professional education in subject matter
within the scope of the continuing professional education requirement.
In response to comments, these regulations have been changed so that
they do not prohibit a sole proprietor from being a qualifying sponsor.
These regulations provide that those seeking recognition as a qualifying
sponsor must file a request with the Executive Director and must provide
all information deemed necessary for approval by the Executive Director,
including information to establish that all programs identified as
qualifying programs by the qualifying sponsor will satisfy the requirements
for qualifying programs. These regulations provide that recognition
as a qualifying sponsor by the Executive Director shall be effective
when approved unless the Executive Director provides that it shall
be effective on a different date, and shall terminate at the end of
the sponsor enrollment cycle. The sponsor enrollment cycles are three-year
periods that begin one-year later than the enrollment cycles, starting
with the sponsor enrollment cycle beginning on January 1, 2012. For
qualifying sponsors approved on or after January 1, 2008, and before
January 1, 2012, the applicable sponsor enrollment cycle will end
December 31, 2011.

These regulations provide that a program’s qualifying
sponsor shall furnish each individual who successfully completed the
qualifying program with a certificate listing the name of the participant,
the name of the qualifying sponsor, the title, location, and speaker(s)
of each session, the date(s) of participation, the total credit hours
earned, how many of those hours consisted of core and non-core subject
matter, how many of those hours relate to ethics, and how many of
the hours were earned for a formal program with respect to the participant.
In response to comments, these regulations clarify that it is only
the qualifying sponsor of a program that may issue a certificate of
participation.

These regulations provide that qualifying sponsors shall provide
each instructor, discussion leader, or speaker with a certificate
of instruction that lists the name of the instructor, discussion leader,
or speaker, the name of the qualifying sponsor, the title and location
of each session at which the individual was an instructor, discussion
leader, or speaker, the date(s) of the program, the total credit hours
earned, how many of those hours consisted of core and non-core subject
matter, how many of those hours relate to ethics, and whether the
program is a formal program with respect to the instructor.

The proposed regulations would have defined separate types of
qualifying programs for formal programs, correspondence and individual
study programs, and teleconferencing programs. These regulations
do not segregate qualifying programs into these types. Instead, these
regulations provide that certain qualifying programs qualify as formal
programs. Each type of program that would have been separately defined
under the proposed regulations may still satisfy the requirements
of a qualifying program.

In response to comments, the Joint Board notes that the qualifying
sponsor must take reasonable steps to verify participation. The nature
of the program will affect the means by which the qualifying sponsor
verifies participation. Under this approach, a qualifying program
that is either a teleconference or a program attended in person may
be a formal program but the manner in which the qualifying sponsor
verifies participation will be different depending on the manner of
participation. In contrast, a correspondence or individual study
program would never be a formal program but could nonetheless be a
qualifying program if the qualifying sponsor verifies participation
(for example, with a written examination).

In response to comments, these regulations clarify that a qualifying
sponsor must maintain records to verify that each program it sponsors
is a qualifying program, including the certificates of completion,
certificates of instruction, and outlines and course material. In
the case of programs with more than one session, the qualifying sponsor
must keep records to verify which session(s) each participant completed.
These regulations clarify that all of these records are required
to be maintained for six years after the end of the sponsor enrollment
cycle in which the program was held.

Several commenters asked for clarification on the ability to
use emerging technologies for record retention and transmission.
The regulations do not specify the format in which records must be
maintained or provided but merely require that copies be provided
and produced upon request. Accordingly, records may be maintained
electronically so long as a copy can be produced upon request.

4. Formal programs

These regulations require at least one-third of the required
hours to consist of participation in a formal program. In response
to comments on the proposed regulations, these regulations expand
the definition of a formal program to take into account modern technologies
that permit participation and interaction among participants who are
in different locations.

Under these regulations, whether a program qualifies as a formal
program is determined on a participant-by-participant basis. These
regulations provide that a qualifying program qualifies as a formal
program with respect to a participant only if the participant simultaneously
participates in the program in the same physical location with at
least two other participants engaged in substantive pension service.
The participants with respect to whom the program is a formal program
must also have the opportunity to interact with another individual
qualified with respect to the course content who serves as an instructor,
whether or not the instructor is in the same physical location as
the participants. Groups of three or more participants who are in
the same physical location may participate in a formal program in
person, via the internet, videoconferencing, or teleconferencing.
If the qualifying program is pre-recorded, to qualify as a formal
program there must be a qualified individual who serves as the instructor
and is available to answer questions immediately following the pre-recorded
program.

Under these regulations, a qualifying program is a formal program
with respect to the instructor only if the instructor is in the physical
presence of at least three other individuals engaged in substantive
pension service.

5. Alternate ways of earning continuing professional
education credit

These regulations provide six ways to satisfy the continuing
professional education requirement other than through participation
in a qualifying program. First, up to half of the required hours
may be satisfied by serving as an instructor, discussion leader, or
speaker at a qualifying program. For this purpose the instructor,
discussion leader, or speaker is credited with 4 hours of continuing
professional education credit for each 50 minutes completed during
a qualifying program. In response to a comment, these regulations
clarify that if the program is a formal program with respect to the
instructor, only the time spent during the actual program is counted
toward satisfaction of the formal program requirement. The nature
of the subject matter will determine whether the credit hours consist
of core or non-core subject matter. These regulations expressly provide
that panelists, moderators, and others who are not required to prepare
substantive subject matter for their portion of the program are not
entitled to credit as an instructor, discussion leader, or speaker,
but they may qualify for participation in the program.

Second, up to 25 percent of the required hours may be awarded
to the author, co-author, or a person listed as a major contributor
for each hour spent on the creation of peer-reviewed material for
publication or distribution on matters directly related to core or
non-core subject matter. To qualify, the material must be available
on reasonable terms for acquisition and use by all enrolled actuaries.

If the material is re-published or re-distributed, credit will
be awarded only for time spent revising a substantial portion of the
material; for example, to reflect changes in law or practices relative
to the performance of pension actuarial services.

Third, these regulations permit the Joint Board to award continuing
professional education credit for service on (any of) its advisory
committee(s), to the extent that the Joint Board considers awarding
such credit is warranted by the service rendered. This provision
recognizes the fact that the work done by the members of the advisory
committee involves detailed review of materials that constitute core
subject matter.

Fourth, these regulations permit the Joint Board to award education
credit for participation in drafting questions for use on Joint Board
examinations or in pretesting its examinations, to the extent that
the Joint Board considers awarding such credit appropriate. These
regulations limit the education credit for preparation of Joint Board
examinations to 50 percent of the continuing professional education
requirement for the applicable enrollment cycle.

One commenter suggested that the regulations should specify
the number of continuing professional education credits that may be
granted for service on an Advisory Committee to the Joint Board and
other committees involved in the preparation of enrollment examinations,
and to eliminate the 50 percent limit on continuing professional education
requirements that can be satisfied by service on an examination writing
committee. The regulations retain the Joint Board’s authority
to determine how many credits are granted for service rendered.

In the Board’s experience, most actuaries who serve on
an examination writing committee tend to work on only one of the examinations;
the Board believes that the scope of the material covered on a given
examination is not broad enough for service on a writing committee
to count toward more than 50% of the continuing professional education
requirements for a given enrollment cycle. Therefore, although the
Board appreciatively acknowledges the substantial time and effort
expended by members of the writing committees, the final regulations
retain the 50% limit.

The commenter also suggested that service on an Advisory Committee
to the Joint Board throughout an entire enrollment cycle fulfill all
the continuing professional education requirements for that cycle,
including the requirement to earn credits related to ethical standards.
However, the Board does not believe that the exam syllabus or other
work typically done by an Advisory Committee includes enough material
directly related to ethical standards to fulfill the requirement for
this type of credit. Therefore, the Board does not anticipate that
credits related to ethical standards would be granted on the basis
of service on an Advisory Committee.

Fifth, these regulations provide that individuals may earn continuing
professional education credit for achieving a passing grade on proctored
examinations sponsored by a professional organization or society recognized
by the Joint Board. Separate provisions, described in the next paragraph,
apply to the Joint Board’s examinations. These regulations
further provide that such credit is limited to the number of hours
scheduled for the examination that are attributable to content that
qualifies as either core or non-core subject matter and that, regardless
of the nature of the content, none of the credit counts toward the
core credit requirement. All of an enrolled actuary’s non-core
credit requirement may be satisfied with this type of credit.

Sixth, these regulations provide that enrolled actuaries who
are enrolled prior to the beginning of an enrollment cycle may satisfy
the entire continuing professional education requirement for the enrollment
cycle by both (1) achieving a passing score on the Joint Board pension
examination administered during the enrollment cycle and (2) completing
a minimum of 12 hours of continuing professional education through
participation in formal programs during the enrollment cycle.

6. Waivers

These regulations permit the Executive Director to waive all
or part of an enrolled actuary’s continuing professional education
requirement. An enrolled actuary seeking such a waiver must submit
a request for a waiver to the Executive Director. This request must
contain evidence sufficient to demonstrate that the enrolled actuary
made every effort throughout the enrollment cycle to participate in
one or more qualifying programs that would have satisfied the continuing
professional education requirements. The enrolled actuary is required
to submit supporting documentation with the waiver application as
well as any additional documentation or explanation deemed necessary
by the Executive Director. The proposed regulations would have imposed
a deadline on the waiver application. Instead, these regulations
provide that the enrolled actuary seeking to rely on a waiver must
receive the waiver from the Executive Director before filing an application
for renewal of enrollment.

IV. Inactive Enrolled Actuaries

These regulations provide that the Executive Director shall
maintain a roster of individuals who are in inactive status, in addition
to rosters of individuals who are duly enrolled and those whose enrollment
has been suspended or terminated. These regulations also give the
Executive Director explicit permission to publish any or all of the
rosters, including display on the Joint Board’s web site, to
the extent permitted by law.

These regulations extend the period of time that an individual
may remain on the roster of inactive enrolled actuaries from three
years to up to three enrollment cycles. Under these regulations,
a person who is on the roster of inactive enrolled actuaries for three
enrollment cycles without returning to active status must satisfy
the requirements for initial enrollment to become an active enrolled
actuary. For this purpose, these regulations provide a transition
rule that treats enrolled actuaries who are inactive or retired as
of April 1, 2010 as if they were placed on the roster of inactive
enrolled actuaries on that date.

To remain on the roster of active enrolled actuaries, an enrolled
actuary must submit a timely application for renewal showing satisfaction
of the requirements for reenrollment, including completion of the
required continuing professional education hours within the appropriate
time frame.

The Executive Director will automatically move enrolled actuaries
who do not submit a timely application for reenrollment and enrolled
actuaries who submit an application that on its face does not show
information sufficient to satisfy the requirements for renewal (for
example, an application that does not show sufficient continuing professional
education credits). Such enrolled actuaries will be placed on the
roster of inactive enrolled actuaries as of April 1 following the
March 1 due date for the application. Enrolled actuaries who submit
an application that on its face does not show information sufficient
to satisfy the requirements for renewal will not be entitled to a
refund of the application fee. Enrolled actuaries who submit an application
that on its face does not show information sufficient to satisfy the
requirements for renewal will be considered inactive as of the April
1 immediately following the March 1 due date for the application even
if the Executive Director does not become aware of the insufficiency
of the application until after April 1.

In addition, the Executive Director may audit renewal applications
to verify the information submitted. If the Executive Director determines
that the information on the application is inaccurate, the Executive
Director will move the enrolled actuary to the roster of inactive
enrolled actuaries only after notifying the enrolled actuary of the
Executive Director’s intent to do so and giving the enrolled
actuary 60 days to respond. The Executive Director will consider
any written response in making a final determination as to eligibility
for renewal of enrollment. The Executive Director will notify the
enrolled actuary by mail of the final determination as to whether
or not to place the enrolled actuary on the inactive roster at that
time. If the Executive Director makes a final determination to place
an individual on the roster of inactive enrolled actuaries, the individual
may seek review of the determination from the Joint Board by submitting
a request to the Joint Board within 30 days of the notice of final
determination.

These regulations provide that while an individual remains on
the roster of inactive enrolled actuaries, such person may not indicate
to others that he or she is an enrolled actuary and is not eligible
to perform actuarial services as an enrolled actuary under ERISA or
the Internal Revenue Code. These regulations provide that an individual
still on the roster of inactive enrolled actuaries who wishes to return
to active status may file an application for renewal of enrollment,
but the requirements for reenrollment are different depending on whether
the applicant is in the first, second, or third enrollment cycle on
the roster of inactive enrolled actuaries.

These regulations provide that individuals who apply for renewal
of enrollment during their first enrollment cycle on the inactive
roster must complete 36 hours of continuing professional education
between the beginning of the prior enrollment cycle and the date of
the application for renewal.

These regulations provide that individuals who apply for renewal
of enrollment during their second enrollment cycle on the inactive
roster must complete 48 hours of continuing professional education
credit plus demonstrate 18 months of certified responsible pension
actuarial experience. These regulations provide that the continuing
professional education credit must have been earned since the beginning
of the applicant’s first enrollment cycle on the inactive roster.
The qualifying responsible pension actuarial experience must have
occurred after the beginning of the applicant’s first enrollment
cycle on the inactive list.

These regulations provide that individuals who apply for renewal
of enrollment during their third enrollment cycle on the inactive
roster must complete 60 hours of continuing professional education
credit plus demonstrate 18 months of certified responsible pension
actuarial experience. For this purpose, these regulations provide
that the continuing professional education credit must have been earned
since the beginning of the applicant’s second enrollment cycle
and the qualifying actuarial experience must have occurred after the
beginning of the applicant’s second enrollment cycle on the
inactive list.

Regardless of when the inactive enrolled actuary applies for
renewal, these regulations provide that any continuing professional
education credit used to qualify for reenrollment may not also be
used to satisfy the continuing professional education requirement
during the applicant’s first enrollment cycle back on the active
roster.

V. Standards of Performance

These regulations also expand upon the standards of performance
of actuarial services. These regulations add a requirement that an
enrolled actuary shall perform actuarial services only in accordance
with all of the duties and requirements for such persons under applicable
law and consistent with relevant generally accepted standards for
professional responsibility and ethics.

Several comments were received with respect to the standards
of practice provisions that were modeled on the obligations set forth
in Circular 230 of all persons practicing before the IRS. The Joint
Board believes that the rules in Circular 230 pertaining to due diligence,
solicitations, prompt disposition of pending matters, and the return
of client records are equally pertinent to practice before the PBGC
and DOL, as well as the IRS. These provisions have been retained
unchanged from the proposal, except that with respect to the return
of client records. With respect to the return of client records,
a commenter asked that the provision be clarified to provide the ability
to retain records that implicate intellectual property rights. The
Board believes that the duty to return or make available records to
the client should not be made narrower than the scope of the provision
in Circular 230. Nonetheless, to conform more specifically to the
concept of Circular 230 and the purpose of incorporating the provisions
into these regulations, the provision regarding “Records of
the client” for this purpose has been modified to provide only
for the return of documents necessary to comply with legal obligations
under ERISA and the Internal Revenue Code.

These final regulations modify the rules regarding conflicts
of interest. The Joint Board received several comments on the proposed
rule to require that disclosure of conflicts of interest be made in
writing to all affected parties and that the affected parties agree
in writing to the enrolled actuary performing the services. After
consideration of these comments, the Joint Board has determined that
it will adopt rules that are similar to the conflict of interest rules
that apply to those practicing before the Internal Revenue Service.
See Treasury Department Circular No. 230, 31 C.F.R. 10.29. Accordingly,
the regulations provide that, unless an exception applies, an enrolled
actuary shall not perform actuarial services for a client if the representation
involves a conflict of interest. A conflict of interest exists if
either (1) the representation of one client will be directly adverse
to another client; or (2) there is a significant risk that the representation
of one or more clients will be materially limited by the enrolled
actuary’s responsibilities to another client, a former client,
or by a personal interest of the enrolled actuary. Notwithstanding
the existence of a conflict of interest, the enrolled actuary may
represent a client if (1) the enrolled actuary reasonably believes
that the enrolled actuary will be able to provide competent and diligent
representation to each affected client, (2) the representation is
not prohibited by law, and (3) each affected client waives the conflict
of interest and gives informed consent, at the time the existence
of the conflict of interest is known by the enrolled actuary.

Nothing in these final regulations is intended to alter the
rules for practice before the Internal Revenue Service under Treasury
Department Circular No. 230.

The proposed regulations would have imposed a requirement that,
upon learning of another enrolled actuary’s material violation
of the standards of performance of actuarial services, an enrolled
actuary report the violation to the Executive Director. The Joint
Board received many comments in response to this proposal. Several
commenters suggested the elimination of the proposed reporting requirement.
In the alternative, commenters asked that the requirement be significantly
modified. Commenters were concerned that the reporting requirement
would discourage cooperation and sharing of information among enrolled
actuaries and that it would conflict with other rules that require
enrolled actuaries not to disclose confidential or privileged information.
Commenters also suggested that an enrolled actuary should not be
required to report violations that are resolved through discussion
with the other enrolled actuary. Finally, commenters asked for a
clarification of the term material violation.

In light of the comments received, the Joint Board decided not
to include the proposed reporting requirement as part of the standards
of performance for enrolled actuaries. Without amendment, the regulations
already include a rule that if an officer or employee of the Department
of Treasury, the Department of Labor, the Pension Benefit Guaranty
Corporation, or a member of the Joint Board has reason to believe
that an enrolled actuary has violated any provision of the regulations,
or if such person receives information to that effect, he or she may
inform the Executive Director. Without amendment, the regulations
already provide that others may make such a report to the Executive
Director, an officer or employee of the Department of Treasury, the
Department of Labor, the Pension Benefit Guaranty Corporation, or
a member of the Joint Board. These regulations amend that provision
only to provide that the optional report should be made directly to
the Executive Director. Self-policing is an important part of maintaining
the high standards of the profession, and the Joint Board encourages
enrolled actuaries to report violations of the regulations to the
Executive Director. However, in light of the concerns raised by commenters,
the Joint Board decided not to change the existing rule except to
provide that any report should be made directly only to the Executive
Director.

In response to comments, these regulations clarify that the
requirement for an enrolled actuary to ensure that the actuarial assumptions
are reasonable individually and in combination, and the actuarial
cost method and the actuarial method of valuation of assets are appropriate
applies unless the actuarial assumptions or methods are mandated by
law.

Special Analyses

Executive Orders 13563 and 12866 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if regulation
is necessary, to select regulatory approaches that maximize net benefits
(including potential economic, environmental, public health and safety
effects, distributive impacts, and equity). Executive Order 13563
emphasizes the importance of quantifying both costs and benefits,
of reducing costs, of harmonizing rules, and of promoting flexibility.
This rule has been designated a “significant regulatory action”
although not economically significant, under section 3(f) of Executive
Order 12866. Accordingly, the rule has been reviewed by the Office
of Management and Budget.

It also has been determined that section 553(b) of the Administrative
Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations.
It is hereby certified that the collection of information imposed
by these regulations will not have a significant economic impact on
a substantial number of small entities. There are presently only
about 4000 enrolled actuaries and the changes made by the final regulations
will reduce the overall collection of information burden by removing
the requirement for participants in continuing education courses to
keep course materials. Qualified sponsors of continuing education
courses, a few of which are small entities, have a paperwork burden
under these regulations that is substantially the same as the pre-existing
burden. Therefore, the economic impact of the collection of information
requirement will not be significant and the number of small entities
affected by the collection of information requirement will not be
substantial. Accordingly, the Regulatory Flexibility Act (5 U.S.C.
chapter 6) does not apply. The notice of proposed rulemaking was
submitted to the Chief Counsel for Advocacy of the Small Business
Administration for comment on its impact on small business.

Adoption of Amendments to the Regulations

Accordingly, 20 CFR part 901 is amended as follows:

PART 901—REGULATIONS GOVERNING THE PERFORMANCE OF ACTUARIAL
SERVICES UNDER THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974

Paragraph 1. The authority citation for part 901 continues
to read in part as follows:

§901.0 [Amended]

Par. 2. Section 901.0 is amended by removing the phrase “subpart
D of this part is reserved and will set forth” and adding in
its place the phrase “subpart D sets forth” in the second
sentence.

Par. 3. Section 901.1 is amended by:

A. Amending paragraph (g) by removing the phrase “approved
by the Joint Board (or its designee) to perform” and adding
in its place the phrase “approved by the Joint Board for the
Enrollment of Actuaries (the Joint Board), or its designee, to perform”.

B. Adding new paragraphs (i), (j) and (k) to read as follows:

§901.1 Definitions.

* * * * *

(i) Certified responsible actuarial experience means responsible actuarial experience of an individual that has
been certified in writing by the individual’s supervisor.

(j) Certified responsible pension actuarial experience means responsible pension actuarial experience of an individual
that has been certified in writing by the individual’s supervisor
if the supervisor is an enrolled actuary. If the individual’s
supervisor is not an enrolled actuary, the pension actuarial experience
must be certified in writing by both the supervisor and an enrolled
actuary with knowledge of the individual’s pension actuarial
experience.

(k) Enrollment cycle means the three-year
period from January 1, 2011, to December 31, 2013, and every three-year
period thereafter.

§901.10 [Amended]

Par. 4. Section 901.10 is amended by:

A. Amending paragraph (a) by removing the phrase “shall
agree to comply with the regulations of the Joint Board” and
adding in its place the phrase “shall agree to comply with these
regulations and any other guidance as required by the Joint Board”.

B. Adding a second sentence to paragraph (a) to read “A
reasonable non-refundable fee may be charged for each application
for enrollment filed.”

Par. 5. Section 901.11 is amended by:

A. Revising the first sentence of paragraph (a).

B. Revising paragraphs (c) and (d).

C. Revising paragraphs (e) introductory text, (e)(1) and (e)(2)(i).

D. Revising the last sentence of paragraph (e)(2)(ii).

E. Adding new paragraphs (e)(2)(iv), (v), and (vi).

F. Removing paragraph (e)(3).

G. Revising paragraphs (f)(1) and (f)(1)(i).

H. Revising the second sentence of paragraph (f)(1)(ii), and
paragraph (f)(1)(iv).

§901.11 Enrollment procedures.

(a) Enrollment. The Joint Board shall
enroll each applicant it determines has met the requirements of these
regulations, and any other guidance as required by the Joint Board,
and shall so notify the applicant. * * *

(ii) All individuals whose enrollment has been suspended or
terminated; and

(iii) All individuals who are in inactive status.

(2) Publication of Rosters. The Executive
Director may publish any or all of the rosters, including display
on the Joint Board’s Web site, to the extent permitted by law.

(d) Renewal of enrollment. To maintain
active enrollment to perform actuarial services under ERISA, each
enrolled actuary is required to have his/ her enrollment renewed as
set forth herein.

(1) Each enrolled actuary must file an application for renewal
of enrollment on the prescribed form no earlier than October 1, 2010,
and no later than March 1, 2011, and no earlier than October 1 and
no later than March 1 of every third year thereafter. If March 1
is a Saturday, Sunday, or holiday, the due date shall be the next
day that is not a Saturday, Sunday, or holiday.

(2) The effective date of renewal of enrollment for an individual
who files a complete renewal application within the time period described
in paragraph (d)(1) of this section is the April 1 immediately following
the date of application. The effective date of renewal of enrollment
for an individual who files a complete renewal application after the
due date described in paragraph (d)(1) of this section is the later
of the April 1 immediately following the due date of application and
the date of the notice of renewal.

(3) Forms required for renewal may be obtained from the Executive
Director.

(4) A reasonable non-refundable fee may be charged for each
application for renewal of enrollment filed.

(e) Condition for renewal: Continuing professional
education. To qualify for renewal of enrollment, an enrolled
actuary must certify, on the form prescribed by the Executive Director,
that he/she has completed the applicable minimum number of hours of
continuing professional education credit required by this paragraph
(e) and satisfied the recordkeeping requirements of paragraph (j)
of this section.

(1) Transition rule for renewal of enrollment effective
April 1, 2011. (i) A minimum of 36 hours of continuing
professional education credit must be completed between January 1,
2008 and December 31, 2010. Of the 36 hours, at least 18 must consist
of core subject matter; the remainder may be non-core subject matter.

(ii) An individual who received initial enrollment in 2008 must
complete 24 hours of continuing professional education by December
31, 2010. An individual who received initial enrollment in 2009 must
complete 12 hours of continuing professional education by December
31, 2010. In either case, at least one-half of the applicable hours
must consist of core subject matter; the remainder may consist of
non-core subject matter. For purposes of this paragraph (e)(1)(ii),
credit will be awarded for continuing professional education completed
after January 1 of the year in which initial enrollment was received.

(iii) An individual who receives initial enrollment during 2010
is exempt from the continuing professional education requirements
during 2010, but must file a timely application for renewal during
the time period described in paragraph (d)(1) of this section.

(2) For renewal of enrollment effective April 1, 2014,
and every third year thereafter. (i) A minimum of 36 hours
of continuing professional education credit must be completed between
January 1, 2011 and December 31, 2013, and between January 1 and December
31 for each three-year period subsequent thereto.

(ii) * * * For purposes of this paragraph (e)(2)(ii), credit
will be awarded for continuing professional education completed after
January 1 of the year in which initial enrollment was received.

* * * * *

(iv) For an individual who was initially enrolled before January
1, 2008 (and who has therefore completed at least one full enrollment
cycle as of January 1, 2011), at least 12 hours of the 36 hours of
continuing professional education required for each enrollment cycle
must consist of core subject matter; the remainder may consist of
non-core subject matter.

(v) For an individual who was initially enrolled on or after
January 1, 2008, at least 18 hours of his or her 36 hours of continuing
professional education required for the first full enrollment cycle
must consist of core subject matter. Thereafter, for such individuals,
for each subsequent enrollment cycle at least 12 hours of the 36 hours
must consist of core subject matter. In each instance, the remainder
may consist of non-core subject matter.

(vi) When core subject matter hours are required (including
when an individual seeks to return to active status from inactive
status), an individual must complete a minimum of two hours of continuing
professional education credit relating to ethical standards, regardless
of the total number of core hours required.

(f) Qualifying continuing professional education—(1) In general. To qualify for continuing
professional education credit an enrolled actuary must complete his/her
hours of continuing professional education credit under a qualifying
program, within the meaning of paragraph (f)(2) of this section, consisting
of core and/or non-core subject matter. In addition, a portion of
the continuing professional education credit may be earned under the
provisions of paragraph (g) of this section. In any event, no less
than 1/3 of the total hours of continuing professional education credit
required for an enrollment cycle must be obtained by participation
in a formal program or programs, within the meaning of paragraph (f)(2)(ii)(A)
of this section.

(i) Core subject matter is program content and knowledge that
is integral and necessary to the satisfactory performance of pension
actuarial services and actuarial certification under ERISA and the
Internal Revenue Code. Such core subject matter includes the characteristics
of actuarial cost methods under ERISA, actuarial assumptions, minimum
funding standards, titles I, II, and IV of ERISA, requirements with
respect to the valuation of plan assets, requirements for qualification
of pension plans, maximum deductible contributions, tax treatment
of distributions from qualified pension plans, excise taxes related
to the funding of qualified pension plans and standards of performance
(including ethical standards) for actuarial services. Core subject
matter includes all materials included on the syllabi of any of the
pension actuarial examinations offered by the Joint Board during the
current enrollment cycle and the enrollment cycle immediately preceding
the current enrollment cycle.

(iv) The same course of study cannot be used more than once
within a given 36-month period to satisfy the continuing professional
education requirements of these regulations. A program or session
bearing the same or a similar title to a previous one may be used
to satisfy the requirements of these regulations if the major content
of the program or session differs substantively from the previous
one.

(2) Qualifying Program—(i) In general. A qualifying program is a course of learning
that—

(A) Is conducted by a qualifying sponsor, within the meaning
of paragraph (f)(3) of this section, who identifies the program as
a qualifying program;

(B) Is developed by individual(s) qualified in the subject matter;

(C) Covers current subject matter;

(D) Includes written outlines or textbooks;

(E) Is taught by instructors, discussion leaders, and speakers
qualified with respect to the course content;

(F) Includes means for evaluation by the Joint Board of technical
content and presentation;

(G) Provides a certificate of completion, within the meaning
of paragraph (f)(3)(iv) of this section, to each person who successfully
completed the program; and

(H) Provides a certificate of instruction, within the meaning
of paragraph (f)(3)(v) of this section, to each person who served
an instructor, discussion leader, or speaker.

(ii) Formal programs—(A) Participants. Formal programs are programs that meet
all of the requirements of this paragraph (f)(2)(ii) and paragraph
(f)(2)(i) of this section. Whether a program qualifies as a formal
program is determined on a participant-by-participant basis. A qualifying
program qualifies as a formal program with respect to a participant
if the participant simultaneously participates in the program in the
same physical location with at least two other participants engaged
in substantive pension service, and the participants have the opportunity
to interact with another individual qualified with respect to the
course content who serves as an instructor, whether or not the instructor
is in the same physical location. Groups of three or more participants
who are in the same physical location may participate in a formal
program in person or via the internet, videoconferencing, or teleconferencing.
If the qualifying program is pre-recorded, to qualify as a formal
program, there must be a qualified individual who serves as the instructor
and is available to answer questions immediately following the pre-recorded
program.

(B) Instructor. A qualifying program is
a formal program with respect to the instructor only if the program
is a formal program under paragraph (f)(2)(ii)(A) of this section
with respect to at least three participants and the instructor is
in the physical presence of at least three other individuals engaged
in substantive pension service.

(3) Qualifying sponsors—(i) In general. Qualifying sponsors are organizations recognized
by the Executive Director whose programs offer opportunities for continuing
professional education in subject matter within the scope of this
section.

(ii) Recognition by the Executive Director. An organization requesting qualifying sponsor status shall file
a sponsor agreement request with the Executive Director and furnish
information in support of such request as deemed necessary for approval
by the Executive Director. Such information shall include sufficient
information to establish that all programs designated as qualifying
programs offered by the qualifying sponsor will satisfy the requirements
of paragraph (f)(2) of this section. Recognition as a qualifying
sponsor by the Executive Director shall be effective when approved,
unless the Executive Director provides that it shall be effective
on a different date, and shall terminate at the end of the sponsor
enrollment cycle. The Executive Director may publish the names of
such sponsors on a periodic basis.

(iii) Sponsor enrollment cycle—(A) Transition sponsor enrollment cycle. The transition sponsor
enrollment cycle is the period beginning on January 1, 2008 and ending
December 31, 2011.

(B) Subsequent sponsor enrollment cycles. After the transition sponsor enrollment cycle, the sponsor enrollment
cycle means the three-year period from January 1, 2012, to December
31, 2014, and every three-year period thereafter.

(iv) Certificates of completion. Upon
verification of successful completion of a qualifying program, the
program’s qualifying sponsor shall furnish each individual who
successfully completed the qualifying program with a certificate listing
the following information:

(A) The name of the participant.

(B) The name of the qualifying sponsor.

(C) The title, location, and speaker(s) of each session attended.

(D) The dates of the program.

(E) The total credit hours earned, the total core and non-core
credit hours earned, and how many of those hours relate to ethics.

(F) Whether or not the program is a formal program with respect
to the participant.

(v) Certificates of instruction. The program’s
qualifying sponsor shall furnish to each instructor, discussion leader,
or speaker, a certificate listing the following information:

(A) The name of the instructor, discussion leader, or speaker.

(B) The name of the qualifying sponsor.

(C) The title and location of the program.

(D) The dates of the program.

(E) The total credit hours earned and the total core and non-core
credit hours earned for the program, and how many of those hours relate
to ethics.

(F) Whether or not the program is a formal program with respect
to the instructor.

(g) Alternative means for completion of credit hours—(1) In general. In addition to credit
hours completed under paragraph (f) of this section, an enrolled actuary
may be awarded continuing professional education credit under the
provisions of this paragraph (g).

(2) Serving as an instructor, discussion leader or
speaker. (i) Four credit hours (that is, 200 minutes)
of continuing professional education credit will be awarded for each
50 minutes completed as an instructor, discussion leader, or speaker
at a qualifying program which meets the continuing professional education
requirements of paragraph (f) of this section. If the qualifying
program is a formal program with respect to the instructor, only the
time spent during the actual program is counted toward satisfaction
of the formal program requirement.

(ii) The credit for instruction and preparation may not exceed
50 percent of the continuing professional education requirement for
an enrollment cycle.

(iii) Presentation of the same material as an instructor, discussion
leader, or speaker more than one time in any 36-month period will
not qualify for continuing professional education credit. A program
will not be considered to consist of the same material if a substantial
portion of the content has been revised to reflect changes in the
law or practices relative to the performance of pension actuarial
service.

(iv) Credit as an instructor, discussion leader, or speaker
will not be awarded to panelists, moderators, or others who are not
required to prepare substantive subject matter for their portion of
the program. However, such individuals may be awarded credit for
attendance, provided the other provisions of this section are met.

(v) The nature of the subject matter will determine if credit
will be of a core or non-core nature.

(3) Credit for publications. (i) Continuing
professional education credit will be awarded for the creation of
peer-reviewed materials for publication or distribution with respect
to matters directly related to the continuing professional education
requirements of this section. Credit will be awarded to the author,
co-author, or a person listed as a major contributor.

(ii) One hour of credit will be allowed for each hour of preparation
time of the material. It will be the responsibility of the person
claiming the credit to maintain records to verify preparation time.

(iii) Publication or distribution may utilize any available
technology for the dissemination of written, visual or auditory materials.

(iv) The materials must be available on reasonable terms for
acquisition and use by all enrolled actuaries.

(v) The credit for the creation of materials may not exceed
25 percent of the continuing professional education requirement of
any enrollment cycle.

(vi) The nature of the subject matter will determine if credit
will be of a core or non-core nature.

(vii) Publication of the same material more than one time will
not qualify for continuing professional education credit. A publication
will not be considered to consist of the same material if a substantial
portion has been revised to reflect changes in the law or practices
relative to the performance of pension actuarial service.

(4) Service on Joint Board advisory committee(s). Continuing professional education credit may be awarded by the
Joint Board for service on (any of) its advisory committee(s), to
the extent that the Joint Board considers warranted by the service
rendered.

(5) Preparation of Joint Board examinations. Continuing professional education credit may be awarded by the
Joint Board for participation in drafting questions for use on Joint
Board examinations or in pretesting its examinations, to the extent
the Joint Board determines suitable. Such credit may not exceed 50
percent of the continuing professional education requirement for the
applicable enrollment cycle.

(6) Examinations sponsored by professional organizations
or societies. Individuals may earn continuing professional
education credit for achieving a passing grade on proctored examinations
sponsored by a professional organization or society recognized by
the Joint Board. Such credit is limited to the number of hours scheduled
for each examination and may be applied only as non-core credit provided
the content of the examination is core or non-core. No credit may
be earned for hours attributable to any content that is neither core
nor non-core.

(i) Achieving a passing score on the Joint Board pension examination,
as described in §901.12(d)(1)(i), administered under this part
during the applicable enrollment cycle; and

(ii) Completing a minimum of 12 hours of qualifying continuing
professional education by attending formal program(s) during the same
applicable enrollment cycle. This option of satisfying the continuing
professional education requirements is not available to those who
receive initial enrollment during the enrollment cycle.

* * * * *

(i) [Reserved].

(j) Recordkeeping requirements—(1) Qualifying sponsors. A qualifying sponsor must maintain
records to verify that each program it sponsors is a qualifying program
within the meaning of paragraph (f)(2) of this section, including
the certificates of completion, certificates of instruction, and outlines
and course material. In the case of programs of more than one session,
records must be maintained to verify each session of the program that
is completed by each participant. Records required to be maintained
under this paragraph must be retained by the qualifying sponsor for
a period of six years following the end of the sponsor enrollment
cycle in which the program is held.

(2) Enrolled actuaries—(i) Qualifying program credits as a participant. To receive
continuing professional education credit for completion of hours of
continuing professional education under paragraph (f) of this section,
an enrolled actuary must retain all certificates of completion evidencing
completion of such hours for the three-year period following the end
of the enrollment cycle in which the credits are earned.

(ii) Qualifying program credits as an instructor,
discussion leader, or speaker. To receive continuing professional
education credit for completion of hours earned under paragraph (g)(2)
of this section, an enrolled actuary must retain all certificates
of instruction evidencing completion of such hours for the three-year
period following the end of the enrollment cycle in which the credits
are earned.

(iii) Credit for publications. To receive
continuing professional education credit for a publication under paragraph
(g)(3) of this section, the following information must be maintained
by the enrolled actuary for the three-year period following the end
of the enrollment cycle in which the credits are earned:

(A) The name of the publisher.

(B) The title and author of the publication.

(C) A copy of the publication.

(D) The date of the publication.

(E) The total credit hours earned, and the total core and non-core
credit hours earned, and how many of those hours relate to ethics.

(iv) Other credits. To receive continuing
professional education credit for hours earned under paragraphs (g)(4)
through (g)(7) of this section, an enrolled actuary must retain sufficient
documentation to establish completion of such hours for the three-year
period following the end of the enrollment cycle in which the credits
are earned.

(k) Waivers. (1) Waiver from the continuing
professional education requirements for a given period may be granted
by the Executive Director only under extraordinary circumstances,
and upon submission of sufficient evidence that every effort was made
throughout the enrollment cycle to participate in one or more qualifying
programs that would have satisfied the continuing professional education
requirements.

(2) A request for waiver must be accompanied by appropriate
documentation. The individual will be required to furnish any additional
documentation or explanation deemed necessary by the Executive Director.

(3) The individual will be notified by the Executive Director
of the disposition of the request for waiver. If the waiver is not
approved, and the individual does not otherwise satisfy the continuing
professional education requirements within the allotted time, the
individual will be placed on the roster of inactive enrolled individuals.

(4) Individuals seeking to rely on a waiver of the continuing
professional education requirements must receive the waiver from the
Executive Director before filing an application for renewal of enrollment.

(l) Failure to comply. (1) Compliance
by an individual with the requirements of this part shall be determined
by the Executive Director. * * *

(2) The Executive Director may require any individual, by first
class mail sent to his/her mailing address of record with the Joint
Board, to provide copies of any records required to be maintained
under this section. * * *

(3) * * * A request for review and the reasons in support of
the request must be filed with the Joint Board within 30 days of the
date of the notice of failure to comply.

(4) Inactive status—(i) Automatic placement on the inactive roster. To remain
on the roster of active enrolled actuaries, an enrolled actuary must
submit a timely application for renewal showing satisfaction of the
requirements for reenrollment, including completion of the required
continuing professional education hours, within the appropriate time
frame. The Executive Director will move an enrolled actuary who does
not submit such an application for reenrollment from the roster of
enrolled actuaries to the roster of inactive enrolled actuaries as
of April 1 following the March 1 due date for the application. However,
if an enrolled actuary completes the required number of continuing
professional education hours after the close of the enrollment cycle,
submits an application for reenrollment, and is informed by the Executive
Director before April 1st that the enrollment has been renewed, then
the Executive Director will not move such individual to the roster
of inactive enrolled actuaries at that time.

(ii) Placement on the inactive roster after notice
and right to respond. The Executive Director will move
an enrolled actuary who does submit a timely application of renewal
that shows timely completion of the required continuing professional
education to the inactive roster only after giving the enrolled actuary
60 days to respond as described in paragraph (l)(1) of this section.

(iii) Length on time on inactive roster. An individual may remain on the roster of inactive enrolled actuaries
for a period up to three enrollment cycles from the date renewal would
have been effective.

(iv) Consequence of being on the inactive roster. An individual in inactive status will be ineligible to perform
pension actuarial services as an enrolled actuary under ERISA and
the Internal Revenue Code. During such time in inactive status or
at any other time an individual is ineligible to perform pension actuarial
services as an enrolled actuary, the individual shall not in any manner,
directly or indirectly, indicate he or she is so enrolled, or use
the term ’’enrolled actuary,’’ the designation
’’E.A.,’’ or other form of reference to eligibility
to perform pension actuarial services as an enrolled actuary.

(v) Returning to active status. An individual
placed in inactive status may return to active status by filing an
application for renewal of enrollment (with the appropriate fee) and
providing evidence of the completion of all required continuing professional
education hours and of satisfaction of any applicable requirements
for qualifying experience under paragraph (l)(7) of this section.
If an application for return to active status is approved, the individual
will be eligible to perform services as an enrolled actuary effective
with the date the notice of approval is mailed to that individual
by the Executive Director.

(5) Time for return to active enrollment. (i) An individual placed in inactive status must file an application
for return to active enrollment, and satisfy the requirements for
return to active enrollment as set forth in this section, within three
enrollment cycles of being placed in inactive status. Otherwise,
the name of such individual will be removed from the inactive enrollment
roster and his/her enrollment will terminate.

(ii) For purposes of paragraph (l)(5)(i) of this section, an
individual who is in inactive or retired status as of April 1, 2010,
will be deemed to have been placed in inactive status on April 1,
2010.

(6) An individual in inactive status may satisfy the requirements
for return to active enrollment at any time during his/her period
of inactive enrollment. If only completion of the continuing professional
education requirement is necessary, the application for return to
active enrollment may be filed immediately upon such completion.
If qualifying experience is also required, the application for return
to active enrollment may not be filed until the completion of both
the continuing professional education and qualifying experience requirements
set forth in this subsection. Continuing professional education credits
applied to meet the requirements for reenrollment under this paragraph
(l)(6) may not be used to satisfy the requirements of the enrollment
cycle in which the individual has been placed back on the active roster.

(7) Continuing professional education requirements
for return to active enrollment from inactive status.
(i) During the first inactive enrollment cycle; 36 hours of qualifying
continuing professional education as set forth in paragraph (e)(2)
of this section, without regard to paragraph (e)(2)(ii) or (e)(2)(iii)
of this section, must be completed. Any hours of continuing professional
education credit earned during the immediately prior enrollment cycle
may be applied in satisfying this requirement.

(ii) During the second inactive enrollment cycle; four-thirds
of the qualifying continuing professional education requirements as
set forth in paragraph (e)(2) of this section (that is, 48 hours),
without regard to paragraph (e)(2)(ii) or (e)(2)(iii) of this section,
plus eighteen months of certified responsible pension actuarial experience,
must be completed since the start of the first inactive enrollment
cycle. Any hours of continuing professional education credit earned
during the first inactive enrollment cycle may be applied in satisfying
this requirement.

(iii) During the third inactive enrollment cycle: five-thirds
of the qualifying continuing professional education requirements as
set forth in paragraph (e)(2) of this section, (that is, 60 hours),
without regard to paragraph (e)(2)(ii) or (e)(2)(iii) of this section
plus eighteen months of certified responsible pension actuarial experience,
must be completed since the start of the second inactive enrollment
cycle. Any hours of continuing professional education credit earned
during the second inactive enrollment cycle may be applied in satisfying
this requirement. No hours earned during the first inactive enrollment
cycle may be applied in satisfying this requirement.

* * * * *

(9) An individual who has certified in good faith that he/she
has satisfied the continuing professional education requirements of
this section will not be considered to be in non-compliance with such
requirements on the basis of a program he/she has attended later being
found inadequate or not in compliance with the requirements for continuing
professional education. * * *

* * * * *

(n) Verification. The Executive Director
or his/her designee may request and review the continuing professional
education records of an enrolled actuary, including programs attended,
in a manner deemed appropriate to determine compliance with the requirements
and standards for the renewal of enrollment as provided in this section.
The Executive Director may also request and review the records of
any qualifying sponsor in a manner deemed appropriate to determine
compliance with the requirements of paragraphs (f)(3) and (j)(1) of
this section.

(o) Examples. The following examples illustrate
the application of the rules of paragraph (l)(7) of this section and
the effective date of an enrolled actuary’s renewal:

Example 1. Individual E, who was initially
enrolled before January 1, 2008, completes 12 hours of core continuing
professional education credit and 24 hours of non-core continuing
professional education credit between January 1, 2011, and December
31, 2013. E files a complete application for reenrollment on February
28, 2014. E’s reenrollment is effective as of April 1, 2014.

Example 2. Individual F, who was initially
enrolled before January 1, 2008, also completes 12 hours of core continuing
professional education credit and 24 hours of non-core continuing
professional education credit between January 1, 2011, and December
31, 2013. However, F does not file an application for reenrollment
until March 20, 2014. The Joint Board notifies F that it has granted
F’s application on June 25, 2014. Accordingly, effective April
1, 2014, F is placed on the roster of inactive enrolled actuaries.
F returns to active status as of June 25, 2014. F is ineligible
to perform pension actuarial services as an enrolled actuary under
ERISA and the Internal Revenue Code from April 1 through June 24,
2014.

Example 3. Individual G, who was initially
enrolled before January 1, 2008, completes only 8 hours of core continuing
professional education credit and 24 hours of non-core continuing
professional education credit between January 1, 2011, and December
31, 2013. G completes another 6 hours of core continuing professional
education on January 15, 2014, and files an application for return
to active status on January 20, 2014. G’s application shows
the timely completion of 32 hours of continuing professional education
plus the additional 4 hours of continuing professional education earned
after the end of the enrollment cycle. The Joint Board notifies G
that it has granted the application on April 20, 2014. Accordingly,
effective April 1, 2014, G is placed on the roster of inactive enrolled
actuaries. G returns to active status as of April 20, 2014. G is
ineligible to perform pension actuarial services as an enrolled actuary
under ERISA and the Internal Revenue Code from April 1 through April
19, 2014. Of the 6 hours of continuing professional education earned
by G on January 15, 2014, only 2 hours may be applied to the enrollment
cycle that ends December 31, 2016.

Example 4. (i) Individual H, who was initially
enrolled before January 1, 2008, completes 5 hours of core continuing
professional education credit and 10 hours of non-core continuing
professional education credit between January 1, 2011, and December
31, 2013. Accordingly, effective April 1, 2014, E is placed on the
roster of inactive enrolled actuaries and is ineligible to perform
pension actuarial services as an enrolled actuary under ERISA and
the Internal Revenue Code.

(ii) H completes 7 hours of core continuing professional education
credit and 14 hours of noncore continuing professional education credit
between January 1, 2014, and May 24, 2016. Because H has completed
12 hours of core continuing professional education and 24 hours of
non-core continuing professional education during the last active
enrollment period and the initial period when on inactive status,
H has satisfied the requirements for reenrollment during the first
inactive cycle. Accordingly, H may file an application for return
to active enrollment on May 24, 2016. If this application is approved,
H will be eligible to perform pension actuarial services as an enrolled
actuary under ERISA and the Internal Revenue Code, effective with
the date of such approval.

(iii) Because H used the 21 hours of continuing professional
education credit earned after January 1, 2014, for return from inactive
status, H may not apply any of these 21 hours of core and non-core
continuing professional education credits towards the requirements
for renewed enrollment effective April 1, 2017. Accordingly, H must
complete an additional 36 hours of continuing professional education
(12 core and 24 non-core) prior to December 31, 2016, to be eligible
for renewed enrollment effective April 1, 2017.

Example 5. (i) The facts are the same
as in Example 4 except H completes 2 hours of
core continuing professional education credit and 8 hours of non-core
continuing professional education credit between January 1, 2014,
and December 31, 2016. Thus, because H did not fulfill the requirements
for return to active status during his first inactive cycle, H must
satisfy the requirements of paragraph (l)(7)(ii) of this section in
order to return to active status.

(ii) Accordingly, in order to be eligible to file an application
for return to active status on or before December 31, 2019, H must
complete an additional 38 hours of continuing professional education
credit (of which at least 14 hours must consist of core subject matter)
between January 1, 2017, and December 31, 2019, and have 18 months
of certified responsible pension actuarial experience during the period
beginning on January 1, 2014.

(iii) Note that the 5 hours of core continuing professional
education credit and the 10 hours of non-core continuing professional
education credit that H completes between January 1, 2011, and December
31, 2013, are not counted toward H’s return to active status
and are also not taken into account toward the additional hours of
continuing professional education credit that H must complete between
January 1, 2017, and December 31, 2019, in order to apply for renewal
of enrollment effective April 1, 2020.

Example 6. (i) The facts are the same
as in Example 4 except H completes 2 hours of
core continuing professional education credit and 8 hours of non-core
continuing professional education credit between January 1, 2014,
and December 31, 2016, and 12 hours of core continuing professional
education credit and 24 hours of non-core continuing professional
education credit between January 1, 2017, and December 31, 2019.
Thus, because H did not fulfill the requirements for return to active
status during his first or second inactive cycles, H must satisfy
the requirements of paragraph (l)(7)(iii) of this section in order
to return to active status.

(ii) Accordingly, in order to be eligible to file an application
for return to active status on or before December 31, 2022, H must
complete an additional 24 hours of continuing professional education
credit (of which, at least 8 hours must consist of core subject matter)
between January 1, 2020 and December 31, 2022, and have at least 18
months of certified responsible pension actuarial experience during
the period beginning on January 1, 2017.

(iii) Note that the total of 15 hours of continuing professional
education credit that E completes between January 1, 2011, and December
31, 2013, as well as the 10 hours of continuing professional education
credit between January 1, 2014, and December 31, 2016, are not counted
toward H’s return to active status and are not taken into account
toward the additional hours of continuing professional education credit
that H must complete between January 1, 2020, and December 31, 2022,
in order to be eligible to file an application for renewal of enrollment
active status effective April 1, 2023.

Example 7. (i) Individual J, who was initially
enrolled July 1, 2012, completes 1 hour of core continuing professional
education credit and 2 hours of non-core continuing professional education
credit between January 1, 2012, and December 31, 2013. Accordingly,
effective April 1, 2014, J is placed on the roster of inactive enrolled
actuaries and is ineligible to perform pension actuarial services
as an enrolled actuary under ERISA and the Internal Revenue Code.

(ii) F completes 5 hours of core continuing professional education
credit and 4 hours of non-core continuing professional education credit
between January 1, 2014, and October 6, 2014. Because J did not complete
the required 12 hours of continuing professional education (of which
at least 6 hours must consist of core subject matter) during F’s
initial enrollment cycle, J is not eligible to file an application
for a return to active enrollment on October 6, 2014, notwithstanding
the fact that had J completed such hours between January 1, 2012,
and December 31, 2013, J would have satisfied the requirements for
renewed enrollment effective April 1, 2014.

(iii) Accordingly, J must complete an additional 24 hours of
continuing professional education (of which at least 12 hours must
consist of core subject matter) during his/her first inactive enrollment
cycle before applying for renewal of enrollment.

Example 8. The facts are the same as in Example 7 except that J completes 17 hours of core continuing
professional education credit and 16 hours of non-core continuing
professional education credit between January 1, 2014, and February
12, 2015. Accordingly, because as of February 12, 2015, J satisfied
the continuing professional education requirements as set forth in
paragraph (e)(2) of this section without regard to paragraph (e)(2)(ii)
thereof, J may file an application for return to active enrollment
status on February 12, 2015.

(p) With the exception of paragraphs (e)(1) and (f)(3)(iii)
of this section, this section applies to the enrollment cycle beginning
January 1, 2011, and all subsequent enrollment cycles.

§901.12 [Removed]

Par. 6. Section 901.12 is removed.

§901.13 [Redesignated as §901.12]

Par. 7. Section 901.13 is redesignated as §901.12.

Par. 8. Newly redesignated §901.12 is amended by revising
the section heading and paragraphs (a), (b), (d), and (e) to read
as follows:

§901.12 Eligibility for enrollment.

(a) In general. An individual applying
to be an enrolled actuary must fulfill the experience requirement
of paragraph (b) of this section, the basic actuarial knowledge requirement
of paragraph (c) of this section, and the pension actuarial knowledge
requirement of paragraph (d) of this section.

(b) Qualifying experience. Within the
10-year period immediately preceding the date of application, the
applicant shall have completed either—

(1) A minimum of 36 months of certified responsible pension
actuarial experience; or

(i) Joint Board pension examination. Successful
completion, within the 10-year period immediately preceding the date
of the application, to a score satisfactory to the Joint Board, of
an examination prescribed by the Joint Board in actuarial mathematics
and methodology relating to pension plans, including the provisions
of ERISA relating to the minimum funding requirements and allocation
of assets on plan termination.

(ii) Organization pension examinations.
Successful completion, within the 10-year period immediately preceding
the date of the application, to a score satisfactory to the Joint
Board, of one or more proctored examinations which are given by an
actuarial organization and which the Joint Board has determined cover
substantially the same subject areas, have at least a comparable level
of difficulty, and require at least the same competence as the Joint
Board pension examination referred to in paragraph (d)(1)(i) of this
section.

(2) For purposes of this section, the date of successful completion
of an examination is generally the date a candidate sits for the examination,
provided that the candidate receives a passing grade on that examination.
However, an applicant who sat for an examination prior to the effective
date of these regulations will be deemed to have sat for such examination
on the effective date.

(e) Form; fee. An applicant who wishes
to take an examination administered by the Joint Board under paragraph
(c)(1) or (d)(1) of this section shall file an application on a form
prescribed by the Joint Board. Such application shall be accompanied
by payment in the amount set forth on the application form. The amount
represents a fee charged to each applicant for examination and is
designed to cover the costs for the administration of the examination.
The fee shall be retained whether or not the applicant successfully
completes the examination or is enrolled.

§901.20 Standards of performance of actuarial
services.

* * * * *

(b) Professional duty. (1) An enrolled
actuary shall perform actuarial services only in a manner that is
fully in accordance with all of the duties and requirements for such
persons under applicable law and consistent with relevant generally
accepted standards for professional responsibility and ethics.

(2) An enrolled actuary shall not perform actuarial services
for any person or organization which he/she believes, or has reasonable
grounds to believe, may utilize his/her services in a fraudulent manner
or in a manner inconsistent with law.

* * * * *

(d) Conflicts of interest. (1) Except
as provided in paragraph (d)(2) of this section, an enrolled actuary
shall not perform actuarial services for a client if the representation
involves a conflict of interest. A conflict of interest exists if—

(i) The representation of one client will be directly adverse
to another client; or

(ii) There is a significant risk that the representation of
one or more clients will be materially limited by the enrolled actuary’s
responsibilities to another client, a former client, or by a personal
interest of the enrolled actuary.

(2) Notwithstanding the existence of a conflict of interest
under paragraph (d)(1) of this section, the enrolled actuary may represent
a client if—

(i) The enrolled actuary reasonably believes that he or she
will be able to provide competent and diligent representation to each
affected client;

(ii) The representation is not prohibited by law; and

(iii) Each affected client waives the conflict of interest and
gives informed consent at the time the existence of the conflict of
interest is known by the enrolled actuary.

(e) Assumptions, calculations and recommendations. (1) The enrolled actuary shall exercise due care, skill, prudence
and diligence when performing actuarial services under ERISA and the
Internal Revenue Code. In particular, in the course of preparing
a report or certificate stating actuarial costs or liabilities, the
enrolled actuary shall ensure that—

(i) Except as mandated by law, the actuarial assumptions are
reasonable individually and in combination, and the actuarial cost
method and the actuarial method of valuation of assets are appropriate;

(ii) The calculations are accurately carried out and properly
documented; and

(iii) The report, any recommendations, and any supplemental
advice or explanation relative to the report reflect the results of
the calculations.

(2) An enrolled actuary shall include in any report or certificate
stating actuarial costs or liabilities, a statement or reference describing
or clearly identifying the data, any material inadequacies therein
and the implications thereof, and the actuarial methods and assumptions
employed.

(f) Due diligence. (1) An enrolled actuary
must exercise due diligence—

(i) In preparing or assisting in the preparation of, approving,
and filing tax returns, documents, affidavits, and other papers relating
to the Department of the Treasury, the Department of Labor, the Pension
Benefit Guaranty Corporation, or any other applicable Federal or State
entity;

(ii) In determining the correctness of oral or written representations
made by the enrolled actuary to the Department of the Treasury, the
Department of Labor, the Pension Benefit Guaranty Corporation, or
any other applicable Federal or State entity; and

(iii) In determining the correctness of oral or written representations
made by the enrolled actuary to clients.

(2) An enrolled actuary advising a client to take a position
on any document to be filed with the Department of the Treasury, the
Department of Labor, the Pension Benefit Guaranty Corporation, or
any other applicable Federal or State entity (or preparing or signing
such a return or document) generally may rely in good faith without
verification upon information furnished by the client. The enrolled
actuary may not, however, ignore the implications of information furnished
to, or actually known by, the enrolled actuary, and must make reasonable
inquiries if the information as furnished appears to be incorrect,
inconsistent with an important fact or another factual assumption,
or incomplete.

(g) Solicitations regarding actuarial services. An enrolled actuary may not in any way use or participate in the
use of any form of public communication or private solicitation related
to the performance of actuarial services containing a false, fraudulent,
or coercive statement or claim, or a misleading or deceptive statement
or claim. An enrolled actuary may not make, directly or indirectly,
an uninvited written or oral solicitation of employment related to
actuarial services if the solicitation violates Federal or State law,
nor may such person employ, accept employment in partnership form,
corporate form, or any other form, or share fees with, any individual
or entity who so solicits. Any lawful solicitation related to the
performance of actuarial services made by or on behalf of an enrolled
actuary must clearly identify the solicitation as such and, if applicable,
identify the source of the information used in choosing the recipient.

(h) Prompt disposition of pending matters. An enrolled actuary may not unreasonably delay the prompt disposition
of any matter before the Internal Revenue Service, the Department
of Labor, the Pension Benefit Guaranty Corporation, or any other applicable
Federal or State entity.

(i) [Reserved].

(j) Return of client’s records.
(1) In general, an enrolled actuary must, at the request of a client,
promptly return any and all records of the client that are necessary
for the client to comply with his or her legal obligations. The enrolled
actuary may retain copies of the records returned to a client. The
existence of a dispute over fees generally does not relieve the enrolled
actuary of his or her responsibility under this section. Nevertheless,
if applicable state law allows or permits the retention of a client’s
records by an enrolled actuary in the case of a dispute over fees
for services rendered, the enrolled actuary need only return those
records that must be attached to the client’s required forms
under ERISA and the Internal Revenue Code. The enrolled actuary,
however, must provide the client with reasonable access to review
and copy any additional records of the client retained by the enrolled
actuary under state law that are necessary for the client to comply
with his or her obligations under ERISA and the Internal Revenue Code.

(2) For purposes of this section, records of the client include
all documents or written or electronic materials provided to the enrolled
actuary, or obtained by the enrolled actuary in the course of the
enrolled actuary’s representation of the client, that preexisted
the retention of the enrolled actuary by the client. The term ’’records
of the client’’ also includes materials that were prepared
by the client or a third party (not including an employee or agent
of the enrolled actuary) at any time and provided to the enrolled
actuary with respect to the subject matter of the representation.
The term “records of the client” also includes any return,
claim for refund, schedule, affidavit, appraisal or any other document
prepared by the enrolled actuary, or his or her employee or agent,
that was presented to the client with respect to a prior representation
if such document is necessary for the taxpayer to comply with his
or her current obligations under ERISA and the Internal Revenue Code.
The term ’’records of the client’’ does not
include any return, claim for refund, schedule, affidavit, appraisal
or any other document prepared by the enrolled actuary or the enrolled
actuary’s firm, employees or agents if the enrolled actuary
is withholding such document pending the client’s performance
of its contractual obligation to pay fees with respect to such document.

* * * * *

(l) The rules of this section apply to all actuarial services
and related acts performed on or after April 29, 2011.

Par. 10. Section 901.31 is amended by revising paragraphs
(a) and (c) to read as follows:

§901.31 Grounds for suspension or termination
of enrollment.

(a) Failure to satisfy requirements for enrollment. The enrollment of an actuary may be terminated if it is found
that the actuary did not satisfy the eligibility requirements set
forth in §901.11 or §901.12.

* * * * *

(c) Disreputable conduct. The enrollment
of an actuary may be suspended or terminated if it is found that the
actuary has, at any time after he/she applied for enrollment, engaged
in any conduct set forth in §901.12(f) or other conduct evidencing
fraud, dishonesty, or breach of trust. Such other conduct includes,
but is not limited to, the following:

* * * * *

Par. 11. Section 901.32 is amended by revising the last sentence
to read as follows:

§901.32 Receipt of information concerning enrolled
actuaries.

* * * If any other person has information of any such
violation, he/ she may make a report thereof to the Executive Director.

Par. 12. Section 901.47 is amended by revising the last sentence
to read as follows:

§901.47 Transcript.

* * * Copies of exhibits introduced at the hearing
or at the taking of depositions will be supplied to parties upon the
payment of a reasonable fee (31 U.S.C. 9701).

Par. 13. Section 901.72 is added to read as follows:

§901.72 Additional rules.

The Joint Board may, in notice or other guidance of general
applicability, provide additional rules regarding the enrollment of
actuaries.

Approved March 2, 2011.

Carolyn Zimmerman, Chairman, Joint Board for
the Enrollment of Actuaries.

Drafting Information

The principal author of these regulations is Michael P. Brewer,
IRS Office of Division Counsel/Associate Chief Counsel (Tax Exempt
and Government Entities). However, other personnel from the Joint
Board and the IRS participated in their development.